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WEEK 13: Topic 11- Marketing Ethics and Responsibility (Part 1)
PREVIEWING THE CONCEPTS: CHAPTER OBJECTIVES
1. Define sustainable marketing and discuss its importance.
2. Identify the major social criticisms of marketing.
3. Define consumerism and environmentalism and explain how they affect marketing strategies.
4. Describe the principles of sustainable marketing.
5. Explain the role of ethics in marketing.
CHAPTER OVERVIEW
This final chapter focuses on the concepts of sustainable marketing, meeting the needs of consumers, businesses, and society – now and in the future – through socially and environmentally responsible marketing actions.
First, the chapter defines sustainable marketing and then looks at some common criticisms of marketing as it impacts individual consumers and public actions that promote sustainable marketing.
Finally, we look at how companies can benefit from proactively pursuing sustainable marketing practices that bring value not just to individual customers but also to society as a whole.
11.1 SUSTAINABLE MARKETING
Sustainable marketing calls for socially and environmentally responsible actions that meet the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. The marketing concept recognizes that organizations thrive from day to day by determining the current needs and wants of target group customers and fulfilling those needs and wants more effectively and efficiently than competitors do. However, satisfying immediate needs and desires doesn’t always serve the future best interests of either customers or the business. Whereas the societal marketing concept considers the future welfare of consumers and the strategic planning concept considers future company needs, the sustainable marketing concept considers BOTH.
11.2 SOCIAL CRITICISMS OF MARKETING
Marketing’s Impact on Individual Consumers
Consumer advocates, government agencies, and other critics have accused marketing of harming consumers through high prices, deceptive practices, high‑pressure selling, shoddy or unsafe products, planned obsolescence, and poor service to disadvantaged consumers.
High Prices
Many critics charge that the American marketing system causes prices to be higher than they would be under more “sensible” systems.
High Costs of Distribution. A long-standing charge is that greedy channel intermediaries mark up prices beyond the value of their services.
How do resellers answer these charges? They argue that intermediaries do work that would otherwise have to be done by manufacturers or consumers.
High Advertising and Promotion Costs. Modern marketing is accused of pushing up prices to finance heavy advertising and sales promotion.
Marketers respond that advertising does add to product costs. But it also adds value by informing potential buyers of the availability and merits of a brand.
Excessive Markups. Critics charge that some companies mark up goods excessively.
Marketers respond that most businesses try to deal fairly with consumers because they want to build customer relationships and repeat business.
Deceptive Practices
Deceptive practices fall into three groups:
1. Promotion
2. Packaging
3. Pricing
Deceptive promotion includes practices such as misrepresenting the product’s features or performance or luring customers to the store for a bargain that is out of stock.
Deceptive packaging includes exaggerating package contents through subtle design, using misleading labeling, or describing size in misleading terms.
Deceptive pricing includes practices such as falsely advertising “factory” or “wholesale” prices or a large price reduction from a phony high retail list price.
The Wheeler‑Lea Act gives the Federal Trade Commission (FTC) power to regulate “unfair or deceptive acts or practices.”
“Puffery” is defined as innocent exaggeration for effect.
Marketers have little to gain from high-pressure selling.
Such tactics may work in one-time selling situations for short-term gain. However, most selling involves building long-term relationships with valued customers.
· Products are not made well and services are not performed well.
· Product safety has been a problem for several reasons, including company indifference, increased product complexity, and poor quality control.
· Many products deliver little benefit, or they might even be harmful.
Critics also have charged that some companies practice planned obsolescence, causing their products to become obsolete before they actually should need replacement.
Other companies are charged with perceived obsolescence—continually changing consumer concepts of acceptable styles to encourage more and earlier buying. An obvious example is the fast-fashion industry with its constantly changing clothing fashions
Marketers respond that consumers like style changes; they get tired of the old goods and want a new look in fashion. Or they want the latest high-tech innovations, even if older models still work.
Poor Service to Disadvantaged Consumers
The American marketing system has been accused of serving disadvantaged consumers poorly.
Critics accuse major chain retailers of redlining, drawing a red line around disadvantaged neighborhoods and avoiding placing stores there.
Clearly, better marketing systems must be built to service disadvantaged consumers.
In cases where marketers do not step in to fill the void, the government likely will.
Marketing’s Impact on Society as a Whole
False Wants and Too Much Materialism
Critics have charged that the marketing system urges too much interest in material possessions.
People are judged by what they own rather than by who they are.
These criticisms overstate the power of business to create needs.
Business has been accused of overselling private goods at the expense of public goods.
A way must be found to restore a balance between private and public goods.
Some options include:
· Making producers bear the full social costs of their operations.
· Making consumers pay the social costs.
Critics charge the marketing system with creating cultural pollution. They feel our senses are being constantly assaulted by marketing and advertising.
Marketers answer the charges of “commercial noise” with these arguments:
1. Because of mass-communication channels, some ads are bound to reach people who have no interest in the product and are therefore bored or annoyed.
2. Ads make much of television and radio free to users and keep down the costs of magazines and newspapers.
Marketing’s Impact on Other Businesses
Critics charge that a company’s marketing practices can harm other companies and reduce competition.
Three problems are involved:
1. Acquisitions of competitors
2. Marketing practices that create barriers to entry
3. Unfair competitive marketing practices.
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GUIDE:
1. A topic on current issues will be posted on third day of Week 13.
2. Students are require to participate actively during topic issues practicum session with relevant ideas and concepts.
3. Students are highly encourage to integrate the discussion with fundamental marketing concepts/tools learned from this course during this session.